Insurers have a bone to pick with certain New Jersey hospitals. Bayonne Medical Center, in particular, is reaping the benefits from the state's regulation that restricts balance billing, reports Healthcare Dive.
Under the provision, which is meant to protect consumers from getting hit with surprise medical bills, insurers must pay for emergency treatment at hospitals and facilities where their coverage is not accepted.
But Bayonne Medical Center has found a way around this. Because New Jersey doesn't cap the bill's amount that hospitals send insurers, the facility turned a $17 million profit within two years, notes the article.
Insurers have been fighting against costly out-of-network hospital bills for quite some time. Back in April, Blue Cross Blue Shield of Tenneessee filed a lawsuit against TriStar Southern Hills Medical Center after the hospital billed a patient's emergency room-service for more than $44,000, FierceHealthPayer previously reported.
Aetna (NYSE: AET) has reported similar disparities between their out-of-network charges versus Medicare reimbursement. For instance, from January 1, 2013 to January 31, 2014, Bayonne and its two sister hospitals, CarePoint Health, charged the insurer an average of $127,667 for pneumonia treatments. The average Medicare reimbursement rate for the same treatments is $9,251, according to Healthcare Dive.
Insurers worry that the for-profit-hospital-model ultimately will increase premiums and hurt patients. Since turning to a for-profit model, many hospitals in New Jersey "have driven up costs for all of Aetna's New Jersey members, conservatively, by a total of $15 million each year," a spokesman for Aetna told Healthcare Dive.
So how can payers and providers work together to maintain a sufficient network without racking up costs? Balance. For starters, insurers who lack experienced in-network hospital services should provide coverage for that service out-of-network, free of cost. That way, consumers are not held accountable for unnecessary payments, FierceHealthPayer previously reported.
- here's the Healthcare Dive piece